Futures for the main U.S. stock indexes were marginally higher Monday, after several weeks of gains, as investors awaited key inflation figures this week to gauge the likelihood of interest rate cuts in 2024.

On Friday, the S&P 500 and Nasdaq Composite registered their third week of gains in a row for the first time since January, while the Dow posted its biggest weekly gain since mid-December.

The indexes were also trading near their peaks, boosted by stronger-than-expected earnings reports and signs of a cooling U.S. labor market that fueled bets of one or two rate cuts by the U.S. Federal Reserve this year.

Investors will focus on a spate of economic readings this week, including monthly producer and consumer prices, retail sales and weekly jobless claims.

The keenly awaited inflation data on Wednesday is expected to show that core consumer prices rose 0.3% on a month-over-month basis in April, for an annual rise of 3.6%, according to economists forecasts in a Reuters poll.

“After upside surprises in the first quarter, markets will focus on service inflation excluding shelter and energy services,” said Ronald Temple, chief market strategist at Lazard.

“After core CPI increased by 36 bps in March, I expect any increase of a similar or larger size to provoke a negative market reaction while any material downside surprise will elicit relief and raise the probability of additional Fed rate cuts by year-end.”

While Fed policymakers in recent days have reassured markets the next move is not a rate rise, the timing of the first rate cut remains uncertain. Cleveland Fed President Loretta Mester is scheduled to speak later in the day.

Traders are currently pricing in rate cuts of 42 bps from the Fed by the end of 2024, according to LSEG’s rate probabilities app, with odds for a September rate cut of at least 25 bps at 63%.

Major companies reporting this week include Home Depot , Walmart, Cisco and Alibaba.

Of the 459 S&P 500 companies that reported through Friday, 77.3% beat analysts’ profit estimates, according to LSEG data. The long-term average is 66.7%.

At 07:21 a.m. ET, Dow E-minis were up 36 points, or 0.09%, S&P 500 E-minis were up 10 points, or 0.19%, and Nasdaq 100 E-minis were up 54.25 points, or 0.3%.

Alphabet slipped 1.7% premarket as Microsoft-backed OpenAI looked set to announce its artificial intelligence (AI)-powered search product on Monday. Microsoft edged up 0.5%.

Arm Holdings climbed 3.2% after Nikkei Asia reported the SoftBank Group-backed chip designer plans to develop AI chips, seeking to launch the first products in 2025.

Meme stock GameStop soared 38% after social media persona “Roaring Kitty,” whose online posts helped spark the 2021 trading frenzy in the company’s shares, posted his first tweet on X after three years.

AMC Entertainment also added 8.2%.

Kenvue shed 1.6% after healthcare giant Johnson & Johnson said it will offload its entire 9.5% stake in the Tylenol maker.

© 2024 Thomson/Reuters. All rights reserved.

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